Environmental Performance
Our success as a company is based on many factors, one of which is executing excellent environmental programs that address a variety of issues. This section presents those programs and their results – of which we are quite proud, but which we constantly seek to improve.
We have recently taken first steps toward expanding our environmental efforts to include our use of natural re- sources and the activities of our suppliers. From our "green" building initiative announced in conjunction with the Clinton Global Initiative to our focus on working with our suppliers on sustainable initiatives, we are leveraging our resources and expertise as broadly and deeply as we can.
Compliance
For AEP, compliance is both a legal requirement and a social responsibility – it is a fundamental expression of our regard for society. It is unacceptable for us to be out of compliance at any time and we are dedicated to achieving our goal of zero environmental enforcement actions. During 2007, we were cited with two formal environmental enforcement actions, compared with nine in 2006. One was related to a landfill issue at our Mountaineer Plant in West Virginia and the other to our inability to meet a new water quality permit limit at the Comanche Plant in Oklahoma.
In 2007, federal, state and local regulatory agencies conducted 112 inspections of our power plants, 15 inspections of our utility operations facilities and 344 inspections of our fuel operations facilities. These resulted in one of the two formal enforcement actions received last year. That does not mean we were perfect all but a couple of times; these inspections point out general areas where improvement is needed. Understanding the requirements and expectations of regulatory agencies is a critical part of our environmental program, and these inspections provide an important feedback mechanism for our employees and executives. We set internal environmental goals each year that are tied directly to the company’s incentive compensation program.
We also conduct our own environmental audits, covering both federal and state requirements. In 2007 we audited five service centers and 31 power plants to assess their environmental compliance and capacity to remain in compliance. Our internal reviews generally showed our environmental programs to be functioning effectively at all locations visited. While overall performance has improved, the audits identified opportunities both to correct and enhance our environmental programs. By year end, all corrective actions identified were complete or in process. Our primary challenge now is to communicate individual audit results more effectively across business units so they can become shared learning, in order to prevent similar occurrences elsewhere.
